Attorney for Wyly brothers charged in huge fraud

Billionaire Brothers Samuel and Charles Wyly Charged With $550 Million Fraud
By JONATHAN BERR
07/30/10
DailyFinance

Billionaire brothers Samuel Wyly (pictured) and Charles Wyly were charged Thursday by the Securities & Exchange Commission with orchestrating a 13-year-long securities fraud that reaped them $550 million in undisclosed gains that were hidden in a series of transactions in the Isle of Man and the Cayman Islands tax havens.

The SEC alleges that the brothers created an "elaborate sham system of trusts and subsidiary companies" to sell more than $750 million worth of stock in four public companies for which they were corporate directors. The brothers also allegedly committed an insider-trading violation connected to one of the companies for an unlawful gain of more than $31.7 million.

According to the SEC, the shares that the Wylys sold in the alleged scheme were of Michaels Stores, Sterling Software, Sterling Commerce, and Scottish Annuity & Life Holdings. The SEC also charged the Wyly's attorney, Michael C. French, and their stockbroker, Louis J. Schaufele III. French was on the board of directors at three of the companies...

Local accountant Graham McMillan helped publicize a Ponzi scheme

I can relate to Graham McMillan.

Burning with "moral outrage," McMillan spent years investigating the scheme, obsessively debunking it on the internet and pressuring authorities to do something. He suspected from the beginning that he'd stumbled upon a Ponzi scheme, a scam in which money from new investors is used to pay big returns to previous investors, sometimes for years, until everything collapses.


The Avenging Accountant
Local accountant Graham McMillan helped publicize a Ponzi scheme that snared his parents. Photo: Sam Hodgson
By RANDY DOTINGA
Oct. 11, 2009

As his brother helpfully pointed out a few years ago, San Diego accountant Graham McMillan could have just let it go.

After all, he'd helped his elderly Canadian father recover the $50,000 he socked away in a suspicious investment scheme that promised 40 percent returns. He'd harangued those he thought were swindlers and alerted authorities in the U.S. and Canada. What more was there to do?

Lots. Burning with "moral outrage," McMillan spent years investigating the scheme, obsessively debunking it on the internet and pressuring authorities to do something. He suspected from the beginning that he'd stumbled upon a Ponzi scheme, a scam in which money from new investors is used to pay big returns to previous investors, sometimes for years, until everything collapses.

Now, McMillan is being hailed as a hero for helping to uncover an alleged scam that snared thousands of American and Canadian investors and may have robbed them of $400 million. It's said to be the largest Ponzi scheme in Canadian history.

One Canadian newspaper called McMillan a "warrior accountant." Another dubbed him a "Ponzi scheme saboteur."

"If everybody did what Graham did, there would be a lot less fraud in this world," said San Diego swindler-turned-scam-hunter Barry Minkow, who investigated part of the alleged scam earlier this decade...